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Money Management Styles for Couples

Finances are a hot topic for any couple, and one that must be discussed prior to making a permanent commitment to each other. There are three basic money management styles that a couple could choose – they could combine all their resources into joint accounts, have completely separate accounts, or a combination of the two. There’s isn’t one right way to do it. It depends on personalities, upbringing, and values.

Joint Finances

Mark and Rebecca deposit their money into a joint account where there is no division of who it belongs to. They did not have a discussion prior to getting married on how they were going to handle their finances. Rebecca assumed that task because she was taught at an early age the importance of having a plan in place in order to reach financial goals. Mark is rarely involved in the details of their finances but is aware of what the bills are, when they are paid, where the money is, and current account balances in case he would have to assume that responsibility.

Having a plan in place is critical for their financial success. “I don’t like surprises”, states Rebecca, “so at the beginning of every year, I re-evaluate our spending plan and review the progress towards our goals and make adjustments accordingly. Tweaks need to be made, here and there, but it is helpful to have an overall picture”.

Tips for Success:

Have a spending plan.

Include spending money for each spouse in the plan.

Determine a threshold, and discuss purchases over that threshold.

Set joint savings goals.

Yours, Mine, and Ours

When Jim and Mary met they both had an established financial life – credit cards, student loans, saving accounts. So, when they started to acquire bills together they decided to open a joint checking account and allocate a percentage of their income to pay those debts. This style works well for them because they have their own discretionary money to spend how they please. “I like that I can buy a pair of shoes and not feel guilty”, says Mary, “But, I also like that when it comes to major purchases that I have someone to discuss it with. I can be impulsive, so this is a big plus!” Lastly, when it comes to setting a goal, for example, to take a vacation, they each put an established dollar amount in an account until they reach the desired amount.

Tips for Success:

Contribute to savings and retirement individually.

Acknowledge that one may be saving their money and the other spending it.

Discuss long term goals and plans for retirement.

Research tax implications if filing a joint return.

Independent Finances

Pete and Angela married in their mid-thirties and had seen what worked, and didn’t, in previous relationships. They felt they were in a place in their lives that they liked being financially independent. So, based on income, they divided up their expenses and each pays their own separate bills each month. “The only problem we have using this system is that we have a hard time looking at the ‘big picture’. We need to do a better job and sit down more often and discuss things, like retirement”, states Pete.

Tips for Success:

Contribute to savings and retirement individually.

Be watchful that all bills are being paid, especially in community property states.